Whistleblowing

Dilemma: Over the summer I was a bookkeeper for a small firm and was asked to charge clients for some extra services we did not provide. I had thought about discussing the appropriateness of this with outside sources, but I wasn’t sure if I should. -Elizabeth

Before striving to become a heroic figure and exposing your own company because you’ve just discovered a rule violation, you had better think twice. Being a “hero” is no walk in the park. Take the advice from Cynthia Cooper, who shared her lessons and experiences during a speech at Cal Poly on January 27, 2006.

While working for WorldCom, Cooper was the leader of the internal audit team that discovered and exposed one of the world’s largest accounting frauds. Taking the brave road less traveled, she informed her company’s board of the $3.8 billion in losses that had been covered up by false bookkeeping.

Most situations we face won’t be on as large of a scale as WorldCom, especially if you work at a factory that makes sandwiches, but many examples of unethical behaviors found at WorldCom are the same across all types of businesses. Specifically, look out for improper diagnosis or treatment, misrepresenting professional credentials, fraud, charging for services not provided, neglect of supervisory responsibilities, misuse of confidential information and exaggerated claims. Under the circumstances of serious harm being done to individuals or the public, followed by no changes in the circumstances after expressing concerns to a superior, and if all the outlets for remedy within the company have been completely exhausted, at that point Whistleblowing can be justified.

Furthermore, considerations such as these need to be taken into account: First, make sure that your knowledge of the situation is complete and accurate. Look into whom you can contact within your organization to stop the misconduct, and be familiar with rule violations in contacting outside parties. If you decide against taking action, ask yourself that if by keeping this known information to yourself, are you breaking any laws or ethical duties? If after taking into account all the above and deciding to “blow the whistle,” make sure it is done in the most appropriate way possible.

Different circumstances call for different measures, and the decision to whistleblow should be a last resort-kind of like having to call your ex for a ride from downtown’s bars. Be prepared for what consequences lie beneath.

Professors at Boston College claim that a “whistleblower hopes to stop the game; but since he is neither referee nor coach, and since he blows the whistle on his own team, his act is seen as a violation of loyalty.” In addition, comradeship, confidence and pretty much everything else is on the line. For Cynthia Cooper, it may not have been her life at stake, but it was her job, health, privacy and sanity that was risked.

Cynthia now promotes professionalism and ethics in the accounting profession across the country to emphasize the importance of strong moral and ethical leadership. She is the first woman to receive the Accounting Exemplar Award and is the president of Cynthia Cooper Consulting.

The Bottom Line: Before you decide to “blow the whistle” on your own company, make sure a just cause exists, all normal ways for resolution have been explored and that you are willing to accept the responsibility for your actions.

Aliza Elbert and Jennette Ballas are both marketing concentrations with a knack for changing the world-one ethical dilemma at a time. This article is written on behalf of SIFE (Students in Free Enterprise) with a goal of teaching others about business ethics. Please provide a rating below of how useful our article was. It helps us measure effectiveness.

Do you have an ethical dilemma that you are dying to have answered by our very own expertise? Excellent! Email us at sifeteam@calpoly.edu.

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